Tech stock sell off over AI investment fears and the expectation of cheaper borrowing through more interest rate cuts are boosting the Financial Times Stock Exchange (FTSE) 100.

The good start to the year for the FTSE 100 has been shared by counterparts in Europe, with the Stoxx 600 at a record high and, like the UK benchmark, set for its best monthly gain since November 2022. Both indexes are outperforming their peers in the US, with the S&P 500 and the Nasdaq 100 having been held back by weakness in tech stocks.

Britain's benchmark share index closed at a record high on Friday and logged its best month in more than two years, while investors prepared for the Bank of England's rate decision next week. The blue-chip FTSE 100 hit an all-time high of 8,

Jerome Powell, chairman of the US central bank, said that the bank is pausing to see further progress on inflation getting toward target following a string of cuts last year.